Singapore court rejects appeal to gain control of US$1.5b sustainable development fund
Litigants cannot hope to prevail by simply shoehorning a claim into the ESG space, says lawyer
A US$1.5 billion claim against a Singapore company that involved seeking redress for some 150,000 people affected by environmental damage in Papua New Guinea has been shot down yet again – the latest episode in a 3-decade legal saga.
The most recent development came in the form of the Singapore Court of Appeal’s decision on Thursday (Sep 15) to uphold an earlier High Court decision from last year to strike out the claim.
The claim was filed as a representative action against the Singapore-registered public company PNG Sustainable Development Program (PNG), on behalf of members of certain communities in the Western Province of Papua New Guinea that had been adversely affected by environmental damage caused by a gold and copper mine there.
PNG had previously held a share in Ok Tedi Mining, which owns and operates the mine – the dividends and other money arising from this share were meant to be applied towards promoting sustainable development within Papua New Guinea, as well as to advance the general welfare of the people of Papua New Guinea, particularly those of the Western Province.
The plaintiffs alleged that PNG owed a fiduciary duty to the affected communities, as the company had allegedly undertaken to act in their interests. The plaintiffs also asserted that US$1.5 billion – earmarked for the sustainable development of Papua New Guinea – had been held in trust for these communities and sought to have the fund be paid over entirely to them.
High Court Judge Vinodh Coomaraswamy had, in his grounds of decision last year, described the case as a “long-running litigation” that had played out over 3 decades, arising initially from the mine and its activities. He described the mine as being “exceptionally lucrative, generating a substantial proportion of Papua New Guinea’s gross domestic product”, but also “exceptionally harmful to the environment in the affected communities”.
In striking out the claims brought by the plaintiffs – which included allegations of a breach of fiduciary duty, conspiracy by lawful and unlawful means, and unjust enrichment – Justice Coomaraswamy ruled that they had failed to make their case, adding that PNG did not owe the plaintiffs a legal duty.
PNG was represented by Dentons Rodyk. The plaintiffs were represented by TSMP Law Corp.
Mark Seah, who led the defence team representing PNG, said the plaintiffs “attempted to superimpose their own agenda onto the finely calibrated suit of contracts to which (PNG) was party, effectively seeking to rewrite (PNG’s) mission”.
He said PNG’s mission – to promote sustainable development for all of Papua New Guinea – was enshrined in this suite of contracts, and remained the exclusive preserve of the contractual counterparties. The recent claims brought on behalf of the affected communities not only sought to upset the balance struck by contracting parties, but did so without legal footing.
“Therefore, by striking out their claims, PNG remains free to pursue its mission as enshrined in those contracts, which is to promote sustainable development of Papua New Guinea, particularly in the Western Province,” Seah added.
The case also has implications beyond itself, as it is believed to be the first time that a representative action of this nature and magnitude has been brought before Singapore’s highest court.
“Cross-border disputes touching on ESG (environmental, social and governance) issues are likely to only increase in volume and complexity,” Seah told The Business Times.
But, despite the level of media and public interest that ESG issues are now attracting, lawsuits involving such matters would still have to go through due process, as with all other cases.
“Disputes that go through the legal process would have to be resolved in the context of the applicable regulatory framework. While the law may need to evolve as the conversation around ESG matures, as this case demonstrates, litigants cannot hope to prevail by simply shoehorning a claim into the ESG space. Legal matters will still have to be decided based on a principled application of the law,” Seah added.
